What Is the Advantage of a Futures Hedge Over an Options

question 103

Multiple Choice

What is the advantage of a futures hedge over an options hedge?

• A)The futures hedge has lower credit risk exposure.
• B)The futures hedge reduces volatility in profit gains on both sides.
• C)The futures hedge is marked to market less frequently.
• D)The futures hedge offers the least downside risk protection.
• E)The futures hedge completely offsets losses but only partly offsets gains.

---

Definitions:

Rewards

Benefits or positive outcomes that are given in response to an individual's actions or behaviors.

Childrearing Years

The period in an adult's life dedicated to raising children, typically ranging from birth to the teenage years.

Newlywed

A person who has recently entered into marriage and is in the early stage of marital life.

Late Adulthood

A phase of life typically defined as beginning at the age of 65, characterized by significant changes in physical health, social roles, and cognitive function.